SK IE Technology, a subsidiary of SK Innovation, has commissioned a new factory for lithium-ion battery separators in Changzhou, China. It is the first separator plant outside Korea for the Group.
The new factory in Changzhou, Eastern China, is equipped with an annual production capacity of 340 million square meters. Together with the existing capacity of 530 million at the Korean main plant in Jeungpyeong, SK IE Technology’s total capacity will thus increase to 870 million square meters. When further plants are completed in Poland and China, the figure is expected to climb to 1.87 billion square meters by 2023.
Media reports indicate that the company has chosen the location in China because the demand for separators in the Middle Kingdom is growing strongly. The location decision goes back to the year 2018. SKI built the factory between March 2019 and August 2020. After a three-month trial phase, the regular operation is now starting. Next to cathodes, anodes and electrolytes, separators are one of the key components of electric car batteries. Their task is to separate cathode and anode, but at the same time enable ion transfer.
According to the Korea Times, SK Innovation is meanwhile considering completely spinning off its battery business. LG Chem is currently taking a similar step with the transfer of its battery division into an independent company called LG Energy Solution. Industry experts have been expecting SK Innovation to follow this example for some time. For the first time, the head of SK Innovation’s battery business, Ji Dong-seop, officially spoke of “considering a spin-off” last month.
The background is that SK Innovation urgently needs massive resources to finance its aggressive expansion. The company is currently building battery factories in China, the USA and Europe. The production capacity is expected to multiply to 41 GWh in 2021. With the aforementioned SK IE Technologies, the Group has already gone through the process of a spin-off in the separator sector. The subsidiary became independent in April 2019, with SKI securing the income of almost 230 million euros through the ten per cent stake held by a Korean private equity fund.
A timetable for the potential spin-off of the battery business is speculation at this stage. Korea Times quotes experts from the banking sector who assume that the Korean company is waiting for the battery business to break even. According to the latest information from SK Innovation, this could happen in 2022. However, the newspaper describes the ongoing legal dispute with LG Chem in the USA as a factor of uncertainty.
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